Congress has not passed another economic rescue package ahead of Election Day — and political gridlock threatens to delay the arrival of federal aid for millions of people and small businesses with potentially disastrous consequences.
The US is experiencing a sharp spike in the number of coronavirus infections and case counts are reaching record highs, according to a New York Times database. The arrival of winter weather will also move people indoors, limiting outside dining at restaurants and other activities.
"All signs suggest that we're in for the worst of this at the same time the situation in Washington is also becoming its worst and most horrible," Michael Strain, economic expert at the American Enterprise Institute, a right-leaning think tank, told The Washington Post.
Most of the aid Congress authorized through the CARES Act earlier this spring for unemployed people and small businesses ended in August. President Donald Trump supports another coronavirus relief plan, though White House economic officials argue the economy is in a self-sustaining recovery.
Negotiations between Democrats and the White House on another large stimulus package appear to have grinded to yet another halt after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin criticized each other last week. Many Senate Republicans also do not back spending another large sum of money, citing the growing national debt.
That stalemate may push the passage of a coronavirus relief bill into early next year, unless lawmakers strike an agreement during a lame duck session when they must act to prevent a government shutdown in December. It's also unclear whether Trump's position will change after the election.
Here's how the lack of a stimulus plan could stymie the economic recovery.
Unemployment benefits will end for millions of people without legislation from Congress by the end of December
Federal unemployment payouts of $600 ended in late July and it haven't been replaced. Workers are now receiving state unemployment checks averaging $330 a week.
But millions of people could exhaust their base benefits by the end of the year while unemployment remains elevated.
In addition, Pandemic Unemployment Assistance is aiding up to 10.3 million gig workers and freelancers that are not typically covered by state unemployment systems. That program will expire on December 31 if Congress doesn't step in to extend the program.
Many more small businesses could go bankrupt
A small business aid initiative called the Paycheck Protection Program stopped accepting applications in early August. It provided low-interest, forgivable loans to small businesses which kept their employees on payrolls. But it only provided relief for about two and a half months.
Over 100,000 small businesses have shuttered because of the pandemic — and many more are still at risk.
Around 40% of restaurants in the US said they would close within the next six months in the absence of further relief, per a September survey released from the National Restaurant Association.
Additional layoffs in industries grappling with pandemic-related slowdowns
The travel and hospitality industries in particular are struggling to stay afloat as fear of the virus compels people to limit their activities. Work-from-home policies and travel warnings further eroded business travel, a key component of hotel and airline earnings.
Airlines including United and American are furloughing over 30,000 workers, while major companies like Disney are cutting tens of thousands of jobs. An industry survey from the American Hotel and Lodging Association in September found 67% of hotels reported they would last only six more months without additional government assistance.
Other large companies are also shedding jobs. Boeing announced over 7,000 layoffs last week. Exxon Mobil is also cutting 1,900 jobs.
A moratorium on evictions is expiring
The Trump administration implemented a moratorium on evictions covering all rental properties in early September. But the measure didn't attach any financial relief, meaning renters will be on the hook for missed monthly payments when it ends in December.
The bill could amount to thousands of dollars for renters. Up to 40 million Americans are at risk of getting evicted when the moratorium expires, according to the National Low Income Housing Coalition.